Get Some Guarantees Before You Retire

NEW YORK (TheStreet) -- Add low interest rates to the updated list of lead-pipe locks in life, right up there with death, taxes and the Cubs failing to win the World Series.

According to the BankingMyWay Weekly Savings Rate tracker, bank savings rate bottomed out again this week, falling to 0.079%. But that's like winning the lottery compared with bank checking account interest rates, which stand at 0.052%.

Bank rates are low because the Federal Reserve wants them that way -- savers be damned.

The Fed's thinking is that low rates lead to cheap money, and it wants money flooding the economy so consumers and businesses will seek more credit, borrow more money and buy cars, homes and other big-ticket consumer goods.

But there's another side to that equation, and it's not favorable to bank savers -- especially retirees.

That's the conclusion of a study out this week from Prudential Financial (PRU) that says the current low interest rate environment has put Americans' retirement security at risk.

The survey turns the Fed's own argument on its head.

Sure, low rates may spur more borrowing and more spending from consumers. But low rates, as Prudential notes, fuel an investment environment where conservative investments (think bank certificates of deposit and U.S. Treasury bonds) have "little investment growth" and "are at risk of being exhausted earlier than expected."

Complicating matters is that U.S. retirees are living longer, meaning lower investment returns in their golden years could really hit retirees where it hurts -- in the pocketbook.

While Prudential considers the low interest rate climate as a high priority for older Americans, most don't seem to be paying close attention.

"While the majority of Americans insure their most valuable assets in order to safeguard against significant financial loss, many don't think to insure their ability to generate lifetime income," explains Bob O'Donnell, president of Prudential Annuities. "Today's guaranteed-income products were designed to help protect retirees from running out of income in retirement, regardless of market conditions or increased longevity."

One way out of the low rate problem is to "insure" future portfolio revenues by buying up individual annuities (which provide a measure of guaranteed income), or other guaranteed income products available in 401(k) plans and individual retirement accounts. Ask your company's plan sponsor or your financial advisers what products work best for you.

"Life insurance helps families manage the risks of not living as long as expected, while guaranteed retirement income products help Americans manage the risk of outliving savings in retirement," O'Donnell says.

You may not realize it, but low savings rates may be dragging your retirement fund down, and your financial future down with it.